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Thursday, December 30, 2010

Economics in Fiction: Two Post-Christmas Book Reviews

Anyone who has studied a little economics knows that popular fiction usually avoids economic themes, and if it does not, butchers them. Yet this year, two novels landed under our Christmas tree that place economic themes front and center and treat them well. The books are Nineteenth Street Northwest by Rex Gosh (Greenleaf Book Group) and Super Sad True Love Story by Gary Shteyngart (Random House).
Rex Gosh, better known to econ wonks as IMF economist Atish R. Gosh, sets his tale of terror and high finance at the fictional International Monetary and Financial Organization (IMFO), whose address and functions are oddly close to those of the real-world IMF and World Bank. The central character is the brilliant and beautiful Sophia Gemaye. Sophia, the daughter of a martyred third-world freedom fighter, has a big grudge against the developed world. At the same time, her upbringing in England has made her squeamish about blowing up planeloads of holiday-bound mothers and children. She reconciles her conflicting values by infiltrating the IMFO's young economists program, where her goal is to draw attention to her homeland's plight by engineering a bloodless crash of the world financial system. Once inside the IMFO, she steals central bank intervention data, which she plugs into a fiendish neural-network model (described by the author in lovingly accurate detail) that is designed to execute the mother of all bear raids. What happens next you will have to read for yourself.

I will confess that I sat down to read this little thriller with very low expectations regarding its likely merits as literature. The first couple chapters did seem predictably clunky, but pretty soon Gosh gets into the rhythm of things, and the text starts to read more like a novel and less like an IMF working paper. Passion, greed, revenge, and suspense interplay nicely with econometrics and exchange rate dynamics. Gosh avoids some of the most obvious stereotypes, for example, by giving his terrorist plotters a wide variety of backgrounds and motivations that make them, while not exactly sympathetic, at least credible as characters.

Where Gosh's thriller is grimly serious, Shteyngart follows the Russian literary tradition of laughter through tears. Super Sad True Love Story depicts a near-future dystopian United States in which economic and social trends already at work today have plunged us deep into a tunnel that has no obvious light at the end.

The world monetary system has undergone several changes in Shteyngart's near future. Debt, inflation, and repeated devaluation have turned the poor greenback into a parody of its present proud status as a reserve currency. The dollar continues to circulate as a medium of exchange, but it can no longer serves as a reliable unit of account. Instead, prices and contracts are indexed to the yuan, so that they adjust automatically to changes in the exchange rate. If you are a HNWI (high net-worth individual), your income and assets are pegged the the yuan but your expenses and debts are not. If you are a LWNI, it is the other way around. Anyone who remembers Russia in the 1990s would immediately understand the system. The European monetary system is not described in as much detail, but there are references to a monetary unit called the "Northern euro" that suggest that much the same has happened there.

Meanwhile, the U.S. political scene has evolved into a single-party system under the aegis of the Bipartisan Party--an entity that bears uncomfortable resemblance to Vladimir Putin's party, United Russia. The Bipartisans are intent on pursuing a losing war in Venezuela, despite the fact that they can't pay their returning veterans. Their economic policy consists of begging the Chinese central bank for more loans and exhorting fellow Americans with slogans like "Spend More! Together We Will Surprise the World!"

Everyone carries around an iPhone-like apparat that includes a handy face-recognition feature. Point your apparat at any stranger, and you can immediately download all kinds of personal data, including the person's all-important credit rating and several other personal indexes that I would perhaps best not describe here. Texting is the dominant mode of communication, although when in close proximity, people occasionally still engage in "verbaling". Reading is out, scanning text streams for data is in, except for Shteyngart's super-nerd hero, who has hidden away a smelly two-volume copy of War and Peace for his private enjoyment.

Rest assured, beneath all the economic and social satire, there is a real love story between a real boy and girl, but the "Super Sad" part of the title seems to refer not so much to their fate as to that of the country. At one point Love Story's hero, who, like its author, comes from a family of Russian immigrants, laments "the looks on the faces of my countrymen--passive heads bent, arms at their trousers, everyone guilty of not being their best, of not earning their daily bread, the kind of docility I had never expected from Americans, even after the many years of our decline. Here was the tiredness of failure imposed on a country that believed only in its opposite."

In short, these are two nice winter reads, and when you finish them, you can put them down with the comforting thought that they are, after all, only fiction. Right?

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